What is USDC?

In the world of stablecoins, the USD Coin (USDC) has gained significant notoriety, offering a reliable numerical representation of the US dollar. Behind the scenes, Circle, a fintech company, is playing a central role in creating and maintaining USDC. This article debunks the mystery surrounding Circle, shedding light on its role and the collateral mechanism that ensures the stability of USDC.

Circle: The Driving Force Behind USDC

Origins and Objectives

Circle, founded in 2013 by Jeremy Allaire and Sean Neville, is a Boston-based financial technology company with a mission to make it easier for money to work on the Internet. One of his significant contributions to the cryptocurrency space is the creation of USDC in collaboration with Coinbase.

USDC: A Joint Venture

USDC is the product of the Center Consortium, a partnership between Circle and Coinbase. This consortium ensures that USDC remains a regulated and transparent stablecoin. Circle and Coinbase act as official issuers of USDC, with a commitment to maintaining a 1:1 parity with the U.S. dollar.

USDC Guarantee Mechanism

Stability guaranteed by reserves in Fiat

USDC stands out as a stablecoin backed by fiat reserves, which means that for every USDC in circulation, there is an equivalent in US dollars held in reserve. This pegging ensures that the value of USDC remains stable and predictable, corresponding to its role as a digital representation of traditional currency.

Transparency Through Audits

To ensure transparency and reassure users, Circle regularly carries out certifications and audits of its US dollar reserves. These third-party audits provide a transparent view of the collateral process, assuring holders that USDC is fully fiat-backed.

Reserve Management and Compliance

Circle actively manages reserve assets to maintain the stability and reliability of USDC. Additionally, the firm complies with regulatory standards and compliance measures, undergoing careful review to ensure the legality and legitimacy of USDC-related transactions.

The Role of Blockchain in USDC Operations

Blockchain infrastructure

USDC operates on the Ethereum blockchain as an ERC-20 token, taking advantage of the benefits of blockchain technology. This choice reinforces the transparency, security, and efficiency of transactions, in line with the fundamental principles of decentralized finance (DeFi).

Smart Contracts and Automation

Transactions involving USDC use smart contracts on the Ethereum blockchain. These smart contracts automate and secure exchanges without requiring intermediaries, ensuring a smooth and trustless experience for users.

Paying with USDC with Lyzi?

To make a cryptocurrency transaction, users must first ensure that they have USDC in their digital wallet, as well as verify that they have activated the Binance payment feature on the app or website.

To do this, two paths are available:

• on the website, users must log in to their account, then access the “More” section, followed by “Pay”, “Setting”, “Order of priority”, and finally “Add currency”.
• As for the application, the process involves logging into the account, followed by clicking on the Pay logo, then clicking on “Setting,” “Priority Order,” and also “Add Currency.”

These simple steps allow users to ensure that they are ready to use their USDC to make purchases with Lyzi with ease.

Conclusion: The Stability Enigma

Circle, as the driving force behind USDC, plays a crucial role in maintaining stability, transparency, and regulatory compliance. The fiat-backed guarantee mechanism, combined with regular audits, demonstrates a commitment to stability and user trust. While USDC continues to be a leading player in the stablecoin landscape, Circle's role as a trusted issuer and guardian of stability remains paramount.